Crafting The Perfect Estate Plan
Estate planning is for everyone. Estate Planning is not just for the old and for the wealthy. There is much more to estate planning than just divvying up your assets when you die. The perfect estate plan protects your wishes, provides for your loved ones, and preserves your legacy. The perfect estate plan is crafted to accomplish your unique goals, and to give you peace of mind. The perfect estate plan contemplates your inevitable death, freeing you to enjoy your life.
“What do I need for my estate plan?”
1 Talk to a Lawyer: You could spin your wheels and try to figure it out on your own. But, nothing replaces an experienced lawyer’s knowledge, training, and skill. You could “save some money” and use drafting software. But, computer programs do not care about you, your goals, or your family, and, when push comes to shove, they are nowhere to be found.
An experienced estate planning attorney can understand your goals, educate you on your options, guide you through the process, and draft impeccable documents protecting your wishes, providing for your loved ones, and preserving your legacy. The right experienced estate planning attorney will be there through the good times, and the bad, and act as a trusted advisor, counselor, and provide you shelter from life’s storms.
2 Craft a Will and Trust: Many people think they can write a will and be done with it all. But, a comprehensive estate plan really requires more. For starters, wills alone must go through probate. Probate is a court process where your estate pays to have a judge decide what you wanted to do with your estate. Probate is costly since your estate must pay for it. Probate is in open court, where anyone can attend. So, any hope you have of maintaining privacy is gone. Finally, probate judges decide what they think you would have wanted and pass along your estate accordingly. So, probate is basically an expensive way to air your dirty laundry, and have someone else decide how it should be sorted.
An appropriate trust on the other hand avoids probate, saving money, maintaining privacy, keeping control of your affairs, and maybe even reducing taxes. Most estate plans require a revocable living trust. A revocable living trust allows you to amend, or revoke your trust at anytime. Meaning you maintain full control of your trust until you have passed away or become incapacitated, at which point a successor trustee, someone named in the trust, who you trust, takes over. So, why would anyone ever want an irrevocable trust? It can sometimes be wise to divest yourself of direct ownership of assets for various reasons. When you put your assets into an irrevocable trust, the assets are no longer under your control in the eyes of the law. This might come in handy if you are trying to qualify for Medicaid, so that you can afford assisted living facilities. This might also come in handy if you are a very high net worth individual, and you are looking to save some money on estate taxes.
Even if you have an appropriate trust, we still say “crafting a will and trust” because the will acts like a catch-all to move assets into your trust in the event there as an asset that was not put into your trust while you were alive. These are sometimes called “pour over wills”.
3 Draft a Durable Power of Attorney: A Power of Attorney is a document allowing you to name someone else to make decisions on your behalf regarding your legal, financial, and personal affairs. This typically includes paying your bills, contacting lawyers and financial advisors, and running your business. Without a Power of Attorney you might need to go to Court to have a guardian appointed, which is typically costly, embarrassing, and avoidable.
4 Craft Advance Healthcare Directive / Healthcare Power of Attorney: Advance Directives are commonly referred to as living wills. Advance Directives allow you to inform medical caregivers of your wishes, and appoint someone to make medical decisions on your behalf if you are unable to do so for yourself. Additionally, a HIPAA Authorization allows you to give your loved ones access to your medical information so they can make the medical decisions you would want them to make, with the best information available.
5 Plan Guardianship Designations: If you have children, you have undoubtedly thought about who you would want to take care of them if something happened to you. Choosing a guardian for your children is often one of the most difficult decisions made in estate planning. However, it is critical that this decision is made as the Courts and feuding family members will decide if you do not, and there is a significant chance your children will be in foster care while the Courts decide.
6 Plan Beneficiary Designations: Some assets, like life insurance policies, and retirement assets, like 401(k)’s and IRA’s, require you to designate who you want to be the beneficiary using a beneficiary designation form. People typically name their spouse, or their children. But, sometimes it makes sense to name a trust as a beneficiary.
7 Draft a Letter of Intent: While not necessarily a part of your legal documents, a letter of intent can be a critical piece of the estate planning puzzle. The letter of intent can serve as valuable evidence if anyone ever challenges your will or trust. The letter can be introduced to show the court why you wanted what you wanted. But, the letter also allows you the opportunity to tell your loved ones your wishes. The letter often makes it easier for your loved ones when you are gone since it provides the opportunity to say why you want Johnny to have this baseball card, or Mary to have this piece of heirloom jewelry. Many people say their primary goal of estate planning is to preserve and protect relationships with loved ones, after you are no longer here. The letter of intent helps you do just that.
Those are the steps of crafting the perfect estate plan. Now that you know the basics, are you ready to take the first step? Schedule your FREE consultation today. We look forward to helping you craft the perfect estate plan for you and your family.
